By Quentin Hardy, Staff Reporter of The Wall Street
Journal Garry Haltof thinks electronics giant Motorola Inc.
has flipped out. Mr. Haltof of Rochester, N.Y., was dreaming of riches
two years ago. He had created a cellular-telephone holder he called the
"Flip Clip," and Motorola, the world's biggest cellular-phone maker, was
talking to him about possible deals. Now Motorola not only says it developed the product
but also is trying to squash Mr. Haltof's trademark on the name, claiming
that when it comes to cell phones, Motorola owns the word "flip."
The flip flap could take years to straighten out. Mr.
Haltof, who gave up his work as a design consultant and took out a
home-equity loan to pursue his Flip Clip vision, calls the situation
tragic. "I'm going to be driven out of business and it's not right," he
says. His story is a cautionary tale for entrepreneurs
contemplating deals with big companies. According to Mr. Haltof,
Motorola's accessories division was initially keen on the Flip Clip. The
plastic cradle is designed to hold the cellular handsets with flip-down
mouthpieces advertised as "flip phones" -- particularly the kind made by
Motorola -- inside a car. But last year, Motorola asserted that engineers
elsewhere in the company had already drawn up a similar phone cradle, Mr.
Haltof says. "Their general patent counsel called me after I'd
showed (the product) around," says Mr. Haltof, who claims that talks had
just culminated in Motorola requesting a price for 100,000 Flip Clips.
"'Don't talk to us anymore,' (the lawyer) said, 'we think we may have
invented your product."' Motorola, based in Schaumburg, Ill., declines to
comment on the specifics of what it sees as a potential patent dispute but
notes that it gets hundreds of product ideas from outside contractors
every year. Each company must agree in writing that Motorola doesn't
necessarily think the idea is original and won't necessarily buy it.
Haltof, too, signed the agreement.* Indeed, Motorola has tens of thousands of engineers
with notebooks full of drawings for products they've dreamed up. Product
managers, such as the ones Mr. Haltof contacted, don't know a fraction of
what is in those books or whether an engineer's doodle might eventually be
a product. Soon after Motorola spurned him, Mr. Haltof applied
for the trademark* "Flip Clip" for the product, which once appeared in this
newspaper's "Form and Function" column. Motorola contested Mr. Haltof's
application, asserting that the word "flip" is closely tied to Motorola's
flip phones. Mr. Haltof's company, Haltof Product Design Inc., has
exactly one employee -- him. Motorola has 142,000. But the corporate
Goliath has one big disadvantage compared with Mr. Haltof. Motorola
earlier this year lost its own trademark application for "flip phone." The U.S. Patent and Trademark Office determined in
April that the word was in common usage among several cell-phone makers,
such as Sweden's AB LM Ericsson, which makes a similar phone. Motorola is
appealing the decision. Meanwhile, the trademark office did clear "Flip Clip"
for Mr. Haltof, apparently deciding that this was a unique term. Motorola
filed in opposition to that trademark decision, and Mr. Haltof's lawyer is
now battling it out with Motorola's lawyers. Motorola maintains that Mr. Haltof's trademark is
invalid because the Flip Clip gets its identity from Motorola's marketing
of flip phones. "The term 'flip' is identified with products from
Motorola," says Jonathan Meyer, corporate counsel for Motorola. Mr. Haltof says Motorola has offered him $5,000 for
the rights to the term "Flip Clip." (The company won't comment.) Not
enough, he says. "I've already spent $30,000 developing this," he says.
"If they added two zeros (to the offer), we'd be talking." The worst part of it all, Mr. Haltof says, is that he
feels his dealings with the company were "by the numbers." The small print
on the Flip Clip's instructions even reads, in both English and Spanish,
"Flip Phone and Motorola are trademarks of Motorola Inc." Motorola was
applying for the trademark at the time, Mr. Haltof explains. "I was being polite," Mr. Haltof says. "Of course, I
printed that long before Motorola came after me."

*(editors note: Haltof had applications pending for
two patents and a Flip-Clip trademark before showing his design to
Motorola)